Utility Changes Still Don’t Answer Key Question: What If You Just Can’t Pay?

Earlier this year, the West Seattle Helpline, which provides financial assistance to people who need help paying their utility bills, learned about a troubling change the city’s two utilities, Seattle City Light (City Light) and Seattle Public Utilities (SPU), were making as part of their transition to a new joint billing and customer contact system.

The change, which past shutoff patterns indicate would disproportionately impact customers in the 98118 ZIP code (South Seattle), would have made it harder for many families with overdue bills to get up to date, and would have given them less time to do so. “These across-the-board shutoffs are doing more harm than good,” West Seattle Helpline Chris Langeler says. “It’s getting colder and we can’t have folks without water or heat as the weather gets rough.”

The new customer information system, memorably named the New Customer Information System (NCIS), consolidated the utilities’ previously separate billing systems and, among other changes, created a uniform policy for dealing with people who fail to pay their bills. If you’ve heard of the system at all, it’s probably because it was in the news earlier this year for launching months behind schedule and at least $34 million over budget.

Before the city consolidated their billing systems, SPU and City Light had slightly different policies for working with people who failed to pay their bills within a 51-day billing cycle, and, if necessary, shutting off their electricity or water. City Light gave customers just 30 days to pay their bills in full, but only required payment of 50 percent right away; SPU gave customers 60 days to pay, but required 75 percent up front to avoid shutoff. When the two agencies were consolidating their billing systems as part of the switch to NCIS, they essentially decided to adopt the worst parts of both policies, which would have required delinquent customers to repay 75 percent of their bills within 30 days, or risk shutoff and an additional shutoff fee of $164.

In response to the concerns raised by Langeler, council member Lisa Herbold brought the issue to both utilities’ attention, and after Herbold submitted a budget proposal that would have required both utilities to adopt the lower, 50 percent, threshold, the two utilities changed their joint policy to require customers to pay back half their bill within 60 days.

Last year, SPU shut off water to 3,044 customers; City Light cut off power to 4,624. Most of those customers were concentrated, officials from both utilities say, in Southeast Seattle, Delridge, and parts of far North Seattle. As a map illustrating shutoff patterns provided by SPU demonstrates, the greatest concentration of utility disconnections between 2013 and 2016 was in the 98118 ZIP code—an area that includes Columbia and Hillman Cities and parts of Rainier Beach and Beacon Hill.

“It’s not surprising where economic hardship exists,” Chris Courtney, head of credit and collections for SPU, acknowledges. Neither agency could provide specific demographic data for the households where utilities they disconnect, but Langeler notes that “people of color disproportionately bear the risk of having their water or electricity shut-off under the current policies. That’s what we see in West Seattle and White Center, and if we had data city-wide, I’d bet we’d see the same thing: low-income families of color being hit hardest.”

Langeler says the impacts to individuals and families who lose access to power and water can be immediate and long lasting. “In addition to the very real effects for the folks who have been shut off—[difficulty] bathing, having to find water in other places, asking neighbors to fill up buckets so they can take water back home—[SPU is] not helping them get on stable footing” by shutting off their water, Langeler says. “The fear and stress that that adds can have its own detrimental health impacts. It adds in another layer of panic and it makes it harder to focus as these families are trying to get their stability back.”

The bottom line, Langeler says, is that “The folks we see who have their utilities shut off are the folks who don’t have the funds to pay.”

SPU spokesman Andy Ryan says one reason the utility cuts off people’s water—instead of, say, giving them additional time to pay their debts—is that SPU is asking questions like, “are we just going to get more people getting deeper in debt? … Our biggest concern all along has been that we not entice people to put things off. That is going to make it harder for them later.”

Danielle Purnell, a strategic advisor for SPU, says the policy change “really only impacts people who are having short-term financial hardships. [It’s meant] to help people make it through to the next bill and keep on service. It doesn’t necessarily help people who live on the ragged edge or who are having a hard time making ends meet over the long term. If you’re having a hard time paying your bills, you’re going to need to be connected to other social services; you’re going to need to look at conservation.”

One of the programs that is meant to help people on the “ragged edge” of poverty (as well as those well above that state) is the city’s utility discount program, which provides a 60 percent discount on utility bills for people making up to 250 percent of the federal poverty rate—about $30,000 for an individual or $61,000 for a family of four. (You can see the areas of high discount program enrollment, which in some cases correspond with lower disconnection rates, on the map SPU provided.)

In 2014, Mayor Ed Murray pledged to double enrollment in the program, and the utilities actually met that goal ahead of schedule, largely by auto-enrolling low-income people when they apply for other benefits. However, many eligible ratepayers remain unenrolled (Real Change estimates that about 75,000 Seattle residents are eligible for the program), a gap City Light spokesman Scott Thomsen attributes in part to the stigma associated with accepting government benefits.

“For some of them, there’s a pride issue—they want to pay their bill just like everyone else,” Thomsen says. “For some of them, there are trust issues with the government.” And then, for some of them, “the process itself was challenging.”

Ah, yes. The process. During our meeting and phone conversations, representatives of both utilities pointed out repeatedly that the form to apply for the discount program is “now only one page.” It would be nitpicking to point out that that isn’t true, because the real issue is that applying for the program requires gathering extensive, time-consuming documentation of a customer’s income sources—from paychecks to federal welfare (TANF) benefits to social security to child support.

This process sounds basic, but it can be arduous and time-consuming to pull together, print, and submit proof of every source of income they’ve had in the past 30 days. (Previously, the city required proof of hardship for the past two months, but they’ve recently reduced that to one.). Utility officials say the process is somewhat challenging by design.

“We offer the largest discount of any utility in the country, and we also have one of the highest eligibility levels,” City Light’s Scott Thomsen says. “This is a very generous program, and with that comes the desire to make sure that the people who are getting the assistance qualify for that assistance.” Thomsen contrasts Seattle’s program to those in other cities, “where the application process is fairly simple and easy” but the dollar benefit is much lower. With better benefits, in other words, come more stringent requirements, “because you’re involving more money,” Thomsen says.

One of the things that might disqualify a person for the discount program is having too much income because of government benefits—things like Temporary Assistance for Needy Families (TANF), Social Security income (SSI). Even health care premium payments for Medicare and Medicaid, which are taken out of a person’s Social Security check before it ever hits their mailbox or bank account, count as gross income against the total amount that person can earn to qualify for the discount program.

Utility officials argue that anyone living on TANF or SSI checks is almost certainly poor enough to qualify for a discount—“I can’t imagine that someone who was subsisting on [assistance] would ever get close to the [cutoff] limit,” SPU’s Ryan says— but Herbold’s office and the spokesmen for both utilities say they’re exploring ways to address the issue anyway.

Why should assistance people get because they’re poor count against their ability to get other assistance they need because they’re poor? For that matter, what’s the point in cutting off utilities to a few thousand people a year, anyway? Real Change director Tim Harris argues that “if you are on TANF, you are desperately poor—if anybody needs the utility rate discount, it’s somebody on fucking TANF.” Harris believes that “what’s behind [the policy] is the understanding of utilities as a commodity like any other commodity, as opposed to being a human necessity.”

I brought this up in my meeting with officials for both utilities—if only a few thousand people fail to pay their bills every year, why not just forgive those folks’ debts and save the time and effort spent sending people out to their homes to manually disconnect their utilities? The money lost must be minuscule, so is it just … the principle of the thing?

The answer seems to be: Kind of. “Our biggest concern all along has been that we not entice people to put things off. That is going to make it harder for them,” Ryan says. “Our hesistancy has been, are we going to get more people even deeper in debt?” And, he adds: “How do you pay for it?”

Right now, that isn’t SPU’s or City Light’s problem. Instead, the burden of paying for people to keep the lights on, or the water running, falls largely on organizations like Langeler’s, which bridge the gaps when a customer can’t pay and the City of Seattle refuses to budge. Langeler praises SPU and City Light for being flexible enough to change their late-payment policies, but the city still acts harshly toward those who can’t scrape enough together to pay for basic services. That means thousands of people each year, including a huge concentration in South Seattle, will continue to find themselves in the dark.

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